After a decade of cutthroat competition for global fast-fashion players who made their mainland debuts from the 2000s but exited China in recent years, we’re entering an era where the premium-fashion category is also losing allure as the new generation of consumers migrate toward a more experience-driven sharing economy.
Looking back at 2019, the fashion industry took a bigger hit than in past years, due to a more mature market, changing needs and expectations of a demanding consumer, the general economic slowdown, and much smaller budgets. The current pandemic has also plateaued the fashion category.
Foreign fashion brands, read this before entering the Chinese marketplace.
1. In China, social media and e-commerce are, and will continue to stay, very monopolized.
Social commerce platforms Redbook and Douyin now have such strong bargaining power that they have started enforcing their own monopolistic policies, starting from what type of fashion brands can enter their platform, to the type of ad buys and content that brands can showcase, to the type of influencers brands are allowed to collaborate with. If these aren't respected, penalties or fines will be imposed. These platforms, hot among fashion brands, are also implementing their own talent policy to have more control over brand owners, who can only work with the platform’s official talent agency.
2. SEO strategy in China should shift from search engines to social commerce sites.
So many brands have been placing their bids on Redbook recently that we’re forecasting it to become a serious SEO technique to reach GenZ’s in China, even better than Baidu’s search engine. Redbook is not a platform to ignore. “I'm always checking out Redbook for the latest products and reviews before I purchase almost anything; I no longer need to go on Baidu because I can have a richer and deeper experience by checking out Redbook. I think my mom still checks Baidu though,” according to a 24-year-old local in Shanghai I spoke to. However, don’t let this suck you in. Operating a branded account on Redbook comes with high costs from creating content specifically for this platform, paired with a healthy ad-buy budget to compete with current competitors on the app. The Redbook search algorithm is less straightforward than Instagram for instance, and is often dealt on a case-by-case basis, depending on the sales team, KOL resources and content authenticity.
3. A piece of key advice is to trust your local partners for fashion content requirements.
It’s really important, as what may work in Western countries as a unique selling point won’t necessarily work in China. Moreover, if your brand decides to enter on Chinese e-commerce platforms such as Tmall, they will usually also require you to have specific content that matches their shopping festivals, such as 5.20, 6.18, 11.11, etc. The same logic applies for social media here, so it’s hard to just copy and paste or replicate content from other global markets. It’s really about approaching China with a more in-depth, fast-paced, and social-driven mindset, which is fundamental.